US investors worried about SA

Article By: Nick Kotch

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American investors are concerned about South Africa’s spate of labour problems, including deaths in mining protests, Rebecca Blank, the acting US Secretary of Commerce, warned on Wednesday when she launched the Obama administration’s "Doing Business in Africa" campaign in Sandton.

"US companies, US businesses, watch these things on the news and it affects their view of whether South Africa looks like the place to bring their next investment," she said.

Ms Blank was asked whether recent labour unrest in the mining and agricultural sectors was having a negative effect on American investors - the very constituency that her visits to South Africa and Kenya this week are aimed at attracting to Africa.

"The recent labour issues that have arisen around mining and some of the deaths are of great concern. You want to create a sense of stability," she told a news conference after addressing a lunch hosted by Business Unity South Africa.

"Any business leader will tell you that their investment commitment to an area is very strongly related to their sense of political and economic stability in that area," she said.

She did not specifically refer to the killings of 34 miners by police at Lonmin’s Marikana platinum mine on August 16. But the incident and subsequent violent clashes at other mines and among farm workers in the Western Cape have received global and damaging publicity.

The big picture is that trade between the whole of Africa and the rest of the world has been booming, with six of the 10 fastest-growing economies in the world in Africa. China is the biggest beneficiary because of its huge appetite for African natural resources over the past decade. It has overtaken the US as the continent’s main trading partner if the 27-nation European Union is not taken as a single entity.

Nevertheless, two-way trade between Africa and the US has tripled over the past decade. Bilateral US-South Africa trade in merchandise rose to nearly $17bn in 2011, a 22% increase on the previous year, US figures show.

"For decades, people around the world have talked about doing business in Africa. But today, it’s real. It’s happening. And Africa is rising as a result," Ms Blank said.

Despite her implicit appeal to South Africa to protect social and industrial peace, she said the country was a vital gateway to the rest of the continent because of its large and stable economy, adding that "stable and strong and growing economies are usually also peaceful and secure economies".

Article continues on page two: US President Barack Obama said much of American business was still unaware of the "tremendous trade and investment prospects" in Africa...